Transfer of mutual funds to the US

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Stoopid Monkey
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Joined: Fri Aug 21, 2009 2:29 pm

Transfer of mutual funds to the US

Post by Stoopid Monkey »

I have a mutual fund account in Canada (non-registered) and wish to move it to my Vanguard fund here. Should I do a direct transfer or pull the money out of my account then deposit here? I do not want to be taxed on it as it is not income, simply a fund transfer.

Which is the wisest method? -Thanks for your replies!
nelsona
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Post by nelsona »

First off, the mutual funds you have in canada must be sold, they cannot be transferred, as the funds are only available to Cdn residents.

So sell them and bring the money to US and invest wherever you want. Have your Cdn broker deposit the money into your CDn bank account and then have that bank drsaft you a US check for deposit in a US bank.

Since you have moved to US, of course you are subject to Cdn departure tax on your fund values when you left canada, and will be taxable in US on the growth since you left.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Stoopid Monkey
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Joined: Fri Aug 21, 2009 2:29 pm

Post by Stoopid Monkey »

Sorry, I'm far from being an accountant and being able to understand anything that falls under this.

I've already been declared a non-resident of Canada (with the NR73 form). I did not get a departure tax at that time... Now I've got the mutual fund with Scotia McLeod in Canada. I've opened an account with Vanguard here in the States. They tell me I can have Scotia do a direct transfer to the Vanguard fund (maybe [i]they[/i] are mis-informed). Will I be taxed in the US as an income when I deposit the funds here in the States?

Thanks for your help!
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

YOU have to file a departure return. See the Emigrants guide from CRA, it explains your resposibilities with regards to deemed disposition upon departure from Canada. It is your responsibility.

Scotia is incorrect. Your Cdn mutual funds will need to be sold.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Stoopid Monkey
Posts: 3
Joined: Fri Aug 21, 2009 2:29 pm

Post by Stoopid Monkey »

In 07 I filed as a non resident, then called CRA who informed me of an additional tax I had to pay (a really small insignificant amount), which I sent in. He also told me I was all done and cleared with Canadian taxes and no longer had to file.

The info for direct transfer of funds came from an agent at Vanguard who gave me clear directions on how to transfer from my account in Canada to my American account. All I want to know is if I'll be taxed on it like if it were income.
nelsona
Posts: 18677
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Your Cdn taxes are finished, if indeed the deemed disposition tax was paid (you had to file a special form T1243, if you did not, you are NOT finished with your '07 taxes).

However, now that you are US resident, any SALE of any fund you have will trigger a gain based on the value when you left canada and the sale price.

A TRANSFER of a fund from one broker to another doe not trigger any tax.

But, trust me, vanguard will not accept a transfer of any Cdn licensed mutual funds to a US account, despite what some telephlunkie may have told you, because quite simply they are not legally allowed to. Welcome to the world of terrible US customer service, which you can expect from brokers, IRS, phone co, DMV, etc.

So, you WILL need to sell them from Scotia, and then buy different ones from Vanguard.

This will result in a capiatl gain, assuming your funds have gained from the time you left Canada 'til now, or a loss.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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